Yesterday’s session was indecisive as markets closed basically flat after the recent run up with consumer discretionary and industrials leading the way. The RMZ  closed down 0.136% @ 703.21 despite mildly positive data from Case-Shiller of a 4.6% y/y increase in May for the 20-city home price index, the fourth straight annual increase and the largest since August 2006. Still a good day considering the gains we’ve had in real estate related names. Earnings thus far have been encouraging—SLG caught a bid during the conference call after reaffirming full year guidance and closed up 1% on the day. WYN boosted guidance this morning and is bid up early while KIM, ACC, SKT, CHH, and EGP all reported solid quarters. Homebuilders fared worse than most in our space with the XHB closing down 3.5% on the session—many of the names in the etf were up 5+% on Monday. LVS reported a strong quarter and is bid up 2.5%--MGM, WYNN and BYD are bid up in sympathy. On the desk we were again active trading swap orders and saw some activity from dedicated players who were better to buy, in what seemed like a defensive effort not to miss a further move higher.  

 

July 27 (Bloomberg) -- About 18.9 million homes in the U.S. stood empty during the second quarter as surging foreclosures helped push ownership to the lowest level in a decade.

     The number of vacant properties, including foreclosures, residences for sale and vacation homes, rose from 18.6 million in the year-earlier quarter, the U.S. Census Bureau said in a report today. The ownership rate, meaning households that own their own residence, was 66.9 percent, the lowest since 1999.

Today's Real Estate Stories
Macro/Technicals | Active Names | Sector News, M&A, Capital Raises

Macro/Technicals

SP Futures: 1111.20 ; +0.03
RMZ: 703.21; -0.136
XHB: 15.27; -3.477
IYR: 52.01; -0.019
SNL: -0.92

Leaders: PHHM +4.48% SPF +3.02% SUI +2.70% FVE +2.68% FBCM +2.57% LRY +2.48%
Laggards: FR (4.69%) PCL (4.20%) SFI (4.02%) MPEL (3.58%) MPG (3.55%) TOL (3.47%)

Active Names

 

REITs: AKR, REG, CLI, BEE, HT, DEI, ABR, GGP, HOT, SPG

Homebuilders: PHM, LEN, LEN-B, HOV

Travel Leisure: ASCA, BYD, HTZ, LVS, MGM, ISLE

Distressed: LALLF, LALBF, SIX, SEMX

Sector News, M&A, Capital Raises

 

o    CMBS Recap: Another strong day in CMBS with spreads in ~5pbs with GG10s +345/$100-03.  For the past couple weeks, CMBS has decoupled a bit from corps and the stock mkt.  Saw $421mm in BWICs with AM/AJ paper taking center stage- $255mm in BWICs.  The paper traded well with the Duper/AM basis spread in ~30bps over the past week.  The Duper/AM spread basis for clean '07 paper is low to mid 300s in from mid to high 300s.  Still positive on clean '06/'07 AM paper.  We sold our small piece of BACM 05-5 AJs and are a $85-12 bid for $10mm.  Geordie Walker

o    REITS busy last night…most show nice beats…

§  Downtown office REIT:  BXP: FFO $1.12 vs street near $1.00;  NOI came in better.  upward revision to 2010 FFO outlook; cal 10 am et

§  commercial real estate broker…CBG +6.2% … CB Richard Ellis Group big beat EPS..18c vs street 9c

·         CBG’s EBITDA margin of 13% (ex gains) was the highest it has been since 2007 and beat GS  estimate by over 200bps

·         Call 10:30am EST. Number: (800)-288-8968

§  Jones Lang LaSalle  :  JLL:  beats on NI line.  Revs beat as well ; 9am et call

§  KIM:   FFO beat street;  upped 2101 FFO guidance ; call 10 am et

·         Non Recurring Income Drives Guidance Increase (per citi) : KIM upped 2010 guidance (excluding impairments) by 4c at the low end and 3c at the high end to $1.14 to $1.18. SSNOI is now expected to be flat (previously flat to down 2%). However, KIM’s detailed guidance breakdown shows that the majority of the guidance uplift (~$8.5m) comes from better than expected transactional income year to date, and some minor improvement from lower interest

§  Taubman Centers …TCO call 9am et .. Beats; Increasing Lower End of 2010 Guidance Range

·         Dial-in: (866) 820-1712 (Passcode: 84215802)

§  AKR Acadia Realty Trust reports Q2 FFO … Beat; Guidance Raised… Core Guidance 10% higher

·         Call 12PM ET

§  RPT Ramco-Gershenson reports Q2 FFO

·         Operations Soft (per RBC)

·         Ramco-Gershenson's (RPT-NYSE) 2Q result came in one penny below consensus  after stripping out a $674,000 lease rejection fee received in the quarter. We suspect the stock could trade higher, however, as underlying fundamentals continued to stabilize in the quarter and newly signed leases bode well for core performance in future quarters.  Per BMO

·         2010 FFO/share guidance remained unchanged at $1.04-$1.12.

·         Call 1pm et

§  EGP EastGroup reports Q2 FFO .. Inline With Expectations; Guidance Tightened

·         Results were towards the high end of the company's guidance range of $0.68-0.72.

·         Guidance was tightened to $2.81-2.89, from $2.77-$2.93, with the $2.85 midpointunchanged

·         Results were somewhat mixed as solid leasing activity was offset by downward pressure on rents and higher concessions.  Per WFC

·         Call 11am et

§  CT Capital Trust reports Q2 EPS

·         Call 10 am et

§  SKT Tanger Factory reports Q2 FFO

·         reported 2Q FFO of $0.48/share, in line with consensus, and management tweaked higher the low end of the Company's full year FFO guidance range by two pennies.

·         disappointment that guidance was not raised more meaningfully (consensus of $2.47/share is at the high end of the  Company's FFO range). Per Keybanc

·         Call 10 am et

§  ACC American Campus reports Q2 FFO beats street…

·         call on Wednesday, July 28, 2010, at 11am eastern.

·         (866) 356-4279; the passcode for the conference call is 15676857

o    White House plans to address Fannie, Freddie in August meeting

§  A conference at the U.S. Treasury Department in August will address the direction of housing finance, including government-controlled entities Fannie Mae and Freddie Mac. The gathering will bring together industry leaders, academics, community organizations and other stakeholders, the White House said in a statement. MarketWatch (27 Jul.)

o    FNM, FRE…Many Ideas, Little Direction for GSEs' Future

§  If the Obama administration was looking to comments filed by more than 300 individuals, banks, trade groups and other companies for guidance in crafting a future for the government-sponsored enterprises, it had better have a Plan B.

§  About the only common theme in the letters is the utter lack of consensus among various players. In the nearly two years since the government seized Fannie Mae and Freddie Mac, the coming debate promises to be a black hole.

§  The proposals range from abolishing Fannie and Freddie to nationalizing them, creating a mortgage insurance fund to back mortgage-backed securities or just returning the GSEs to the way they were before the crisis. Other suggestions included creating a covered bond market to allow banks to issue mortgage-backed debt to finance loans, or allowing each of the 12 Federal Home Loan banks to securitize loans

§  http://www.americanbanker.com/issues/175_143/gses-1023046-1.html?ET=americanbanker:e3921:2269326a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=AB_Daily_Briefing_072810

o    Deutsche Bank Said to Shut Commercial Real Estate Adviser Group (Bloomberg) -- Deutsche Bank AG, Germany’s largest lender, is dismantling a group that advises companies on commercial real estate transactions

o    DJSP -8.9% (withdraws guidance) ….mortgage processing company..only $51M mkt cap

o    HIW Highwoods Properties acquired Crescent Center for $56.2M

o    CSWC Capital Southwest Corp reports net assets as of 30-Jun of $495.9M vs year-ago $424.3M

previous    next Financial: REIT 07:33 FSRV FirstService reports Q2 EPS $0.48 ex-items vs Reuters $0.49 ($21.67) Company reports revenues of $501.4M vs Reuters $459.5M. Adjusted EBITDA reported at 44.6M vs. 41.2M y/y and Reuters $41.7M. * * * * * Financial: REIT 02:54 GFC.FP Gecina reports H1 EPS €2.90 vs year ago €3.08 (€81.10) Company reports H1: Gross rentals €309.6M vs year ago €321.6M Group's rental margin 91.3% vs year ago 91.0% EBITDA €246.2M vs year ago €256.1M Recurrent income€176.5M vs year ago €184.1M The full year is expected to show a similar trend to that seen during the first six months, in line with the budget. In this way, the Group is forecasting a moderate drop in rental income by between (5%) and (6%) on a current basis, further to the disposals and renegotiations carried out in 2009, and an increase in the value of assets by around +4% to +5% on a comparable basis for the full year. - SA London * * * * * Financial: REIT 02:17 DLN.LN Derwent London buys West End property for £146M (1355p) Company has bought Central Cross, 18-30 Tottenham Court Road and 1-2 Stephen Street, London W1 for £146M before costs. - SA London * * * * * Financial: REIT 01:39 LI.FP Klepierre downgraded to sell from hold at Societe Generale (€25.18) Target remains €22. - SA London * * * * * Financial: REIT 18:46 HIW Highwoods Properties acquired Crescent Center for $56.2M ($30.55) Crescent Center is a 336,000 square foot, 9-story Class "A" office building located on Poplar Avenue in Memphis. Highwoods investment is ~$52.6M, which includes planned near-term building improvements and the assumption of secured debt to be recorded at fair value of ~$40.3M, with an implied interest rate of 6.4%. This debt matures in November 2015. Crescent Center is 89.5% occupied and is expected to generate first year cash net operating income of ~$4.8M, excluding $350,000 of expensed acquisition-related costs. The company states the acquisition is immediately accretive to FFO. * * * * * Financial: REIT 18:32 PVR Penn Virginia Resource Partners reports Q2 GAAP EPS $0.32 vs year-ago $0.13 ($23.65) Q2 key metrics: Non-GAAP EPS, which excludes the effects of the non-cash change in derivatives fair value, was $0.15 vs $0.22 y/y. The Reuters consensus for Q2 was $0.34 Distributable cash flow was $30.2M vs $34.6M y/y Company reports revenues of $189.4M vs Reuters $204.2M. Coal royalties revenue was $34.9M vs $30M y/y. Coal production by lessees was 8.9M tons vs 8.7M tons 2010 guidance: Coal royalty tons: 32.5M-33.5M Average coal royalties per ton: $3.50-$3.60 System throughput: 340-350 MMcf per day * * * * * Financial: REIT 18:01 RPT Ramco-Gershenson reports Q2 FFO $0.27 vs Reuters $0.26 ($11.62) Company reports revenues of $30.4M vs Reuters $28.9M. Portfolio occupancy of 90.8% at the end of Q2 vs 90.5% at the end of Q1. Same-center net operating income (NOI) (1.3%) y/y. Reaffirms full year FFO guidance of $1.04-$1.12 vs Reuters $1.03 (note that FFO guidance excludes the non-cash impairment charge recognized in Q1). * * * * * Financial: REIT 17:33 BXP Boston Properties reports Q2 FFO $1.12 vs Reuters $0.99 ($81.63) Company reports revenues of $396.0M vs Reuters $367.9M. Guides Q3 FFO to $1.01-$1.03 vs Reuters $1.02. Guides full year FFO to $4.24-$4.29 vs Reuters $4.12 and prior $4.06-$4.16. * * * * * Financial: REIT 17:32 MGM MGM Resorts confirms intent to sell Atlantic City assets ($11.15) MGM confirmed that the Company has recently reached an agreement to sell four long-term ground leases and their respective underlying real property parcels at The Borgata Hotel Casino & Spa in Atlantic City, New Jersey to Vornado Realty Trust and Geyser Holdings for approximately $73M. Related StreetAccount comments: 7/27/2010 * * * * * Financial: REIT 17:08 AKR Acadia Realty Trust reports Q2 FFO $0.43 vs Reuters $0.41 ($18.25) Company reports revenues of $36.9M vs Reuters $20.9M. FFO excluding $0.15 of non-cash gains is $0.28. Same store NOI decreased (0.6%) y/y Guides full year FFO to $1.20-1.25 (including $0.15 non-cash gain) vs prior 1.10-1.15. Reuters consensus is $1.12. Guides full year same store NOI to 0% -(2%) from (2%) - (4%) * * * * * Financial: REIT 17:07 CBG CB Richard Ellis reports Q2 EPS $0.18 ex-items vs Reuters $0.09 ($15.41) Company reports revenues of $1.17B vs Reuters $1.10B. * * * * * Financial: REIT 16:35 TCO Taubman Centers reports Q2 FFO $0.61 vs Reuters $0.59 ($41.68) Tenant sales per square foot +12.1%; 12-month trailing sales per square foot $523 Leased space was 90.8% on 30-Jun versus 91.3% y/y. Average rent per square foot was $43.20 versus $43.40 y/y Guides full year FFO to $2.65-2.75 vs prior 2.55-2.75 vs Reuters $2.66. * * * * * Financial: REIT 16:34 DX Dynex Capital reports Q2 EPS $0.38 vs year-ago $0.25 ($9.72) Net interest income increased to $7.9M for Q2 of 2010 from $5.9M for the same period in 2009. Net portfolio interest spread for Q2 of 2010 was 2.75%, which is the difference between the yield of 4.76% on the company's interest-earning investment portfolio (excluding cash balances) and its cost of funds of 2.01%. Book value per share was $9.80. * * * * * Financial: REIT 16:33 FSRV FirstService acquired Goodstein Management ($21.66) Goodstein Management is a residential property management company in New York. Goodstein Management manages more than 9,000 units in New York City and generated more than $7M in revenues in f09. Terms of the transaction were not disclosed. * * * * * Financial: REIT 16:21 EGP EastGroup reports Q2 FFO $0.71 vs Reuters $0.70 ($37.13) Highlights: 89.1% Leased, 87.2% Occupied Same property net operating income decreased 3.8% for the quarter and 4.7% without straight-line rent adjustments. Rental rates on new and renewal leases (6.8% of total square footage) decreased an average of 16.1% for the quarter; rental rates decreased 18.9% without straight-line rent adjustments. Guides full year FFO to $2.81-2.89 vs Reuters $2.85. * * * * * Financial: REIT 16:12 SKT Tanger Factory reports Q2 FFO $0.48 vs Reuters $0.48 ($45.45) Company reports revenues of $65.3M vs Reuters $63.7M. Same center NOI reported +2.4%. Occupancy reported 96.9% vs. 94.8% as of 31-Mar. * * * * * Financial: REIT 16:08 ACC American Campus reports Q2 FFO $0.38 vs Reuters $0.37 ($28.94) Company reports revenues of $76.7M vs Reuters $78.9M. Increased net operating income for same store wholly-owned portfolio by 8.2% over Q2 2009. * * * * * Financial: REIT 16:06 KIM Kimco Realty reports Q2 FFO $0.31 ex-impairments vs Reuters $0.27 ($15.07) KIM reported a 2.1% increase in U.S. same-property net operating income (NOI) from Q2 of 2009 Closed the quarter with occupancy of 92.7% in its combined shopping center portfolio and 92.3% in the U.S. portfolio Guides full year FFO to $1.14-1.18 vs Reuters $1.12. Estimated portfolio metrics for the year end 2010: Occupancy for the U.S. shopping center portfolio up approximately 50 basis points; and Same-property NOI for U.S. shopping center portfolio approximately flat. * * * * * Financial: REIT 16:01 HTS Hatteras Financial Corp reports Q2 EPS $1.01 vs Reuters $1.10 ($30.21) Quarter end book value per share of $25.83.